Student Loans and Mortgages

If you are into repayment then as long as the payments are current you should be fine. Some banks/brokers will look at your income potential.

Between DH and I we owe $125K+. I have loans from undergrad and grad, while DH has for law school. My loans are the only ones in repayment bc DH is still in school. When we met with the mortgage broker we told him that we planned to consolidate our loans (individually) and told him how much the monthly payments would be. That's the number he used when looking at our monthly expenses. So he didn't look at the total debt per se, but whether we could handle the payments.

They qualified us for a ridiculous amount, but we purchased a house for half the amount bc we wanted to keep our mortgage payments around $1200.

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Posted by MayBride06

But does it matter regarding your debt to income ratio?

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Yes it absolutely counts towards your debt to income ratio... just like an auto loan would.

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Posted by SomethingBlu

I guess it depends then. We're looking at buying out of state and it absolutely does not count. At least not like a credit card or auto loan. One more reason why buying in NY is pretty much completely out of the question for us.

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So you are saying if somebody racks up close to 100k in student loans... it doesn't count?

It may not take as big of a hit on your credit score. But its debt that MUST be paid back and it goes against your DTI.


Maybe I can find a link somewhere that will describe this better.

Didn't take me long to find this.

Linkified


Here is a quote from the article.

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Calculate Your Debt to Income Ratio

Click here for a printable Debt To Income Ratio Calculation Worksheet.

Monthly mortgage payment (including property taxes and insurance) or rent
Monthly home equity line of credit or loan payment
Monthly car payments
Monthly revolving credit payments (furniture, appliance loans, etc.)
Monthly student loan payments
Monthly minimum credit card payments times two
Other monthly loan amounts
Monthly child support payments
TOTAL MONTHLY DEBT PAYMENTS

Monthly net (take-home) pay
Annual bonuses and overtime, divided by 12
Other annual income, divided by 12
TOTAL MONTHLY INCOME

Total Monthly Debt Payments Divided by Total Monthly Income = Debt to Income Ratio

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Posted by DjPiLL

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Posted by SomethingBlu

I guess it depends then. We're looking at buying out of state and it absolutely does not count. At least not like a credit card or auto loan. One more reason why buying in NY is pretty much completely out of the question for us.

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So you are saying if somebody racks up close to 100k in student loans... it doesn't count?

It may not take as big of a hit on your credit score. But its debt that MUST be paid back and it goes against your DTI.


Maybe I can find a link somewhere that will describe this better.

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I have a lot of law school loans and still have a credit score of 800. If you pay on time it won't have a negative impact on your credit score. We also had no problem getting a mortgage for the amount we wanted.

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Posted by FTRBRIDE

I have a lot of law school loans and still have a credit score of 800. If you pay on time it won't have a negative impact on your credit score. We also had no problem getting a mortgage for the amount we wanted.

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Well thats what I was trying to say. It probably won't impact your credit score. But it will count towards your DTI.

With that said... of course if you have an excellent credit score you can probably get a mortgage over the normal 28/36% DTI figures so its probably relative in the end.

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Posted by FTRBRIDE

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Posted by DjPiLL

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Posted by SomethingBlu

I guess it depends then. We're looking at buying out of state and it absolutely does not count. At least not like a credit card or auto loan. One more reason why buying in NY is pretty much completely out of the question for us.

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So you are saying if somebody racks up close to 100k in student loans... it doesn't count?

It may not take as big of a hit on your credit score. But its debt that MUST be paid back and it goes against your DTI.


Maybe I can find a link somewhere that will describe this better.

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I have a lot of law school loans and still have a credit score of 800. If you pay on time it won't have a negative impact on your credit score. We also had no problem getting a mortgage for the amount we wanted.

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This is what I meant...and your link helped that point...thanks Rich!

What I meant is that it impacts your income to debt but not like a credit card because the WHOLE loan isn't taken into consideration, but rather the monthly payments are.